Corus, the former British Steel, which has axed more than 10,000 jobs, including 1,000 in the North-East this year, has seen its pre-tax losses for the first six months mount to £230m.

The steelmaker, which has been hit by the strong pound and harsh competition, said its carbon steel operations, which take in its Teesside operations, had been damaged by over-supply in the face of progressive weakening of demand. However, both its aluminium and stainless steel businesses made operating profits.

Corus has predicted a prospect for a pick-up in steel prices next year. Reductions in output by some of the world's steel producers throughout the summer should lead to some price improvement.

Corus said it had improved competitiveness of its carbon steel business, by cutting capacity with the closure of its iron and steelmaking operations at Llanwern, Wales, and other plants, including the Lackenby Coil Plate Mill.

Chairman Sir Brian Moffat said: "Global economic growth has slowed considerably in 2001.

"Against this background, the market for carbon steel was dominated by the adverse impact of over-supply in the face of the progessive weakening demand.

"This has been evident throughout the half year in the UK, US and Asia-Pacific, and during the second quarter in mainland Europe."

But he added: "Despite the continuing difficult steel market conditions, excellent progress has been made on the implementation of measures aimed at restoring the competitiveness of the group's carbon steel busi-ness.

"Such measures, in addition to those announced last year, will lead to a substantial improvement in the cost base over the next 18 months, both in the UK and the Netherlands."

Corus's figures showed its carbon steel operations made losses of £239m, while aluminium made an operating profit of £36m.

Turnover for the half-year was £4.04bn, down from £4.84bn the same period the previous year.

Bottom-line pre-tax losses were £230m, against a re-stated loss of £27m the previous year.

Shareholders will not be paid an interim dividend and a decision on the final dividend payment will be made next year.

City analysts said the Corus figures were in line with expectations